Draft Benchmarks (Amendment and Transitional Provision) (EU Exit) Regulations 2019

Angela Eagle Excerpts

Tuesday 19th February 2019 General Committees

[The Economic Secretary to the Treasury (John Glen)]

I beg to move,

That the Committee has considered the draft Benchmarks (Amendment and Transitional Provision) (EU Exit) Regulations 2019.

May I start by saying what a pleasure it is to serve under your chairmanship, Mr Gray?

As the Committee will be aware, the Treasury has been undertaking a programme of legislation to ensure that, if the UK leaves the EU without a deal or an implementation period, there continues to be a functioning legislative and regulatory regime for financial services in the UK. The Treasury is laying statutory instruments under the European Union (Withdrawal) Act 2018 to deliver that, and a large number of debates on the SIs have already been undertaken in this place and in the House of Lords. The SI being debated today is part of that programme and was debated and approved by the House of Lords on 18 January.

The SI will fix deficiencies in UK law relating to the regulation of financial benchmarks, to ensure that it continues to operate effectively post-exit. This legislation is important for the regulation and integrity of financial markets in the UK. The approach taken aligns with that of other SIs being laid under the European Union (Withdrawal) Act, providing continuity by maintaining existing legislation at the point of exit, but amending where necessary to ensure that it works effectively in a no-deal context. The benchmarks SI makes amendments to retained EU law on financial benchmarks, known as the EU benchmarks regulation—the BMR—and ensures that the UK continues to have an effective framework to regulate financial benchmarks.

Benchmarks are publicly available indices used in a wide range of markets to help set prices, measure the performance of investment funds or work out amounts payable under financial contracts. They play a key role in the financial system’s core functions of allocating capital and risk, and impact huge volumes of credit products and derivatives. The EU BMR sets requirements on benchmark methodology, transparency and governance.

Benchmarks must be approved in order to be used in the EU after the conclusion of the EU BMR’s transitional period at the end of 2019. To provide benchmarks for use in the EU after that, benchmark administrators located in the EU may apply for authorisation or registration. Third-country administrators or benchmarks may be approved through equivalence, recognition or endorsement. Approved administrators and benchmarks are placed on to the public register maintained by the European Securities and Markets Authority: ESMA.

In a no-deal scenario, the UK would be outside the European economic area and the EU’s legal, supervisory and financial regulatory framework. The UK legislation implementing the BMR and related legislation therefore needs to be updated to reflect that and ensure that the UK’s benchmarks regulation operates properly in a no-deal scenario.

The draft regulations therefore make the necessary amendments to the retained EU legislation to ensure that the regimes are operable in a wholly domestic context. First, this instrument amends the scope of the BMR to apply to the UK only. From exit day, benchmarks and administrators outside the UK will be subject to the onshored third-country regime, and must be approved via recognition, endorsement or equivalence for use in the UK.

[Ms Angela Eagle (Wallasey) (Lab)]

Could the Minister give the Committee an idea of how many people will have to be put through the system, which interacts with our very large financial sector? How many are involved in what he is talking about now? Will it be a big issue for the Financial Conduct Authority or will it be a tick-box exercise? How many countries and organisations are involved?

[John Glen]

Since 2015, the FCA has allocated £16 million to its Brexit onshoring exercise, which has ramped up to 158 full-time staff since March last year, when it had only 28. Following scrutiny from the Secondary Legislation Scrutiny Committee and further dialogue with the FCA, we in the Treasury are convinced that the FCA has the resources to continue to do that work. Publicly available machine-to-machine software onshores those approved through European national competent authorities to the FCA so that they are completely up to date. We foresee no difficulties in that process, but resources have been added. The hon. Lady asks about the number of countries involved. I cannot give her that information now—I do not have it available to me—but I will be able to write to her with it.

Secondly, the instrument establishes a requirement for the Financial Conduct Authority to create a UK benchmarks register, which it will maintain from exit day. Following the transitional window in the BMR, supervised entities may use a benchmark in the UK only if either the relevant administrator or the benchmark is on the FCA register. The instrument will ensure that benchmark administrators that the FCA has already authorised or registered ahead of exit day are automatically migrated from the ESMA register to the FCA register on exit day. It will do the same for third-country benchmarks or administrators that the FCA has already recognised or UK firms have endorsed.

Thirdly, the instrument includes a new transitional provision that takes EU and third-country administrators and benchmarks that appear on the ESMA register at exit day as the result of an approval under the BMR outside of the UK, and temporarily migrates them on to the FCA register for 24 months, beginning with exit day. That will enable continued use of those benchmarks in the UK for a 24-month period, unless and until an application for approval in the UK is refused, or unless they are removed from the ESMA register during that time. That will provide continuity for administrators and users, and minimise market disruption. Administrators and benchmarks subject to that transitional provision must become approved by the FCA under the third-country regime to enable their continued use in new contracts in the UK after that period.

Additionally, the SI removes obligations in retained EU law for the FCA to co-operate and share information with EU regulators as, with no guarantee of reciprocity, those obligations would not be appropriate as of exit day. However, the FCA will still be able to co-operate with EU regulators through the existing framework in the Financial Services and Markets Act 2000, as it is currently able to with all other third countries.

Furthermore, certain regulatory functions under the BMR are currently carried out by EU authorities—primarily the European Commission and the European supervisory authorities, including ESMA. Once the UK leaves the EU, EU bodies will no longer have a mandate to carry out those functions. Therefore, the SI transfers the functions of the Commission to the Treasury, including the power to adopt delegated Acts based on the underlying legislation. The SI also transfers to the FCA the functions of ESMA, such as the function to maintain a register of benchmarks and the power to make binding technical standards. That delegation is in line with the way we have conducted similar SIs across the board.

Finally, the SI makes further minor amendments to retained EU legislation to ensure that the UK’s benchmarks regime operates effectively once it leaves the EU. Taken together, these measures will ensure that the UK retains an effective framework to regulate financial benchmarks. The Treasury worked very closely with the Financial Conduct Authority in drafting the instrument. It has also engaged the financial services industry on the SI, and it will continue to do so. On 8 January, the Treasury published the instrument in draft along with an explanatory policy note, to maximise transparency to Parliament and industry.

In conclusion, the Government believe that the changes made by the instrument are necessary to ensure that the UK has an effective regime for regulating benchmarks and that legislation functions appropriately if the UK leaves the EU without a deal or an implementation period. That is not the Government’s expectation or desire, but it is consistent with the preparation we are doing. I hope Members will be able to support the draft regulations, which I commend to the Committee.

--- Later in debate ---

[Ms Eagle]

It is a pleasure to serve under your chairmanship, Mr Gray—I think for the first time. It is important for us to do a little translation of this highly technical set of instruments that are before us in the event of no deal; I presume that when he replies to the debate, the Minister will confirm that these changes will automatically become defunct if there is a deal.

What we are really talking about with benchmarking is the price of particular assets and contracts being swapped, traded or changed. As my hon. Friend the Member for Oxford East so pointedly observed, this is about trillions of pounds swilling through various international markets in—

[John Glen]

Pensions.

[Ms Eagle]

In assets, cash, pensions, contracts, swaps and all the things that currently make up our global trade in such issues. As the Minister points out from a sedentary position, many people’s future retirement plans are crucially dependent on getting this right.

These kind of EU regulations came into being in the first place because of the LIBOR scandal and the evidence of significant cheating in creating the prices of these benchmarks for these trades to happen. Until the LIBOR scandal, nobody had really looked at how international benchmarks such as LIBOR were generated. Everybody thought it simply happened according to market mechanisms, and that absolutely nothing nefarious was going on.

However, we then discovered that a great deal of nefariosity—I do not know whether that is a word—was going on, and that people’s rewards for indulging in that nefariosity were colossal. That is why all these regulations had to be immediately generated. That is the first thing. This is about a hugely important area of potential market manipulation and cheating, the risks of which, until we became aware the LIBOR scandal, were tiny and the rewards from which, if one indulged in it and got away with it, were colossal.

We also need to think not only about the individual market manipulation that might happen if we get this wrong, but about financial stability itself. If 2008 taught us anything, it was that these very complex and increasingly complicated global money and asset markets, for which these benchmarks effectively represent what is meant to be a market-generated price, are the weakest and least-regulated points across the world. The regime that is the most hands-off becomes the weakest, and—at the same time, paradoxically—the strongest defence against manipulation and disaster.

We know disasters such as the global financial crash affect real people’s lives across the globe. The draft regulations might look like very dry, boring, technical changes that the Minister has brought before us, but they are actually crucial. They are about real issues of financial stability, potential market manipulation and cheating. If we do not get this right, we will become the weakest link.

It is therefore absolutely and utterly crucial that, if we are to establish this kind of regime, we had better be sure that we are doing it correctly, that we have the time to do it correctly and that we have enough people in the FCA with enough sophistication to do it correctly. I worry about the size of our market—£130 billion in gross value, according to the Minister’s own figures. With the sudden ramping up from a mere 28 employees at the FCA to 158 full-time staff, which the Minister talked about, they are going to have to be some of the most sophisticated people on this earth. I hope he is paying them properly—[Interruption.] Not him personally, but the Government, of whom he is the representative in Committee. They had better be good at their jobs. I want the Minister to reassure us about that.

Is the FCA up to it? I do not mean to be horrible, but the Minister is suddenly giving it a lot of responsibility, with new staff: if we get it wrong and there is regulatory arbitrage to be exploited in the way the system works, we know that it will be. That might include leaving loopholes for huge market manipulation and enrichment at the expense of customers, pensioners and the people who are investing in the instruments, who will be traders. If the Minister does not get it right, the consequences will be huge.

How big is the risk? The impact assessment does not really talk about how big it is or the likely costs of the changes. I congratulate the Minister on being one of the few Ministers who has managed to produce an assessment to put before one of these statutory instrument Committees, which we are attending in great numbers at the moment. Large numbers of his ministerial colleagues have not been able to do that, which is a disgrace. That is the way in which the Government are dealing with the situation we find ourselves in.

The costs that the Minister puts before us are described as “unknown: likely significant” or “significant”. There is an inability to quantify the cost to business and to those who are in the market of the sudden change and the no-deal scenario. At a macro level, it is significant but unknowable, but at a micro level, in annex A, the Treasury has come up with a ridiculous little formula for the familiarisation costs for individual companies—as an ex-Treasury Minister, I am familiar with that kind of thing.

The Treasury has decided that the familiarisation cost of a statutory instrument for one firm is the number of words in the statutory instrument divided by the number of words that one can read in a minute—as if being able to read the statutory instrument means that one automatically understands it. In one of the most complex areas of regulation and statutory authority, that is the best that HMRC can come up with.

By the way, that figure has to be multiplied by one over 60 and by the hourly wage rate, which is £330 for a solicitor or legal executive with more than four years’ experience. What a joke! Is the Minister really suggesting that if one could read the statutory instrument at so many words per minute, one would automatically understand what it meant? I have been in the House for 27 years, and I can read quite a few words a minute, but I must confess that I have never come across a statutory instrument that I can automatically understand just because of that, especially in such a complex area.

[Carol Monaghan (Glasgow North West) (SNP)]

As a qualified maths and physics teacher, I think that the formula is frankly ridiculous. The number of words read per minute is what we could call a variable, because it can vary greatly. We might find plenty of lawyers who, in an attempt to increase their fees, become extremely slow readers.

[Ms Eagle]

I agree, but what worries me more about the formula than the variable that the hon. Lady talks about is the idea that somehow reading equals full comprehension of technical subjects. The Minister ought to go back and have a closer look at that, and the Treasury officials who are accompanying him certainly ought to come up with a more sophisticated formula for trying to see what the costs will be.

To sum up, we do not know what these things will cost. My hon. Friend the Member for Oxford East has posed some very important questions about how all of them mesh together and whether there have actually been changes in definitions—sneaky little changes that have gone beyond what the withdrawal Act allows in terms of just transposing issues from EU law into UK law. We would like to know the answers.

I would also like the Minister to tell us a little about the risks that he thinks this regime poses if the FCA really cannot get through to organising these benchmarks and transposing them in practical terms into UK law in the appropriate time scale, in what is a very changing situation—regulating an industry that we know will exploit every tiny bit of regulatory arbitrage that it can come across for its own profit.

--- Later in debate ---

[John Glen]

I think, with the greatest respect, that the hon. Lady is getting two things muddled up. At this point, we are onshoring what already exists. We have a 24-month transition period during which, in a no-deal situation, there would be considerable engagement with industry and regulators about how we would adopt the criteria as a national body independent of the European supervisory authorities. If we were in that situation, we would clearly need to develop a new framework altogether for regulation. How we would harmonise with other bodies outside the UK would depend on the basis of that no deal. If the hon. Lady is asking me whether I am setting out in this SI a comprehensive regime for an independent verification of benchmarks over the next two years in a no-deal situation, I should say that no, I am not.

[Ms Eagle]

It is difficult to think of scenarios that we hope will not happen. We all hope that at some stage sense will break out and there will be time to do this disentangling. Will the Minister reassure me that if there is no deal, the regime that these changes will put in place will be in place the day after no deal, and that there will not be large numbers of loopholes through which very rapid trading, which can be instantaneous, can occur, leading to huge profiteering?

[Anneliese Dodds]

rose—

--- Later in debate ---

[John Glen]

I am grateful for both points. I will first respond to the hon. Member for Wallasey. I assure her that the regulation will onshore and will not create any cliff-edge risks around the loopholes that she refers to. We have worked very closely with the FCA, which provides the technical expertise. I will address her point about the resourcing of the FCA in a moment.

For the record, I do not accept the characterisation of hon. Member for Oxford East of the regulations as hybrid. In a no-deal situation, there would need to be a lot of extra work to create a new permanent regime. In terms of the divergence between the UK and the EU27, the FCA will not necessarily know why a benchmark has been removed from the ESMA register after exit. It is therefore prudent to give the FCA the discretion to make its own assessment so it is able to protect UK markets and consumers. In a no-deal situation, we would be in a world very different from the one we are used to and we take the view that the provision fixes a deficiency caused by our withdrawal.

The hon. Member for Wallasey raised the importance of the benchmarks being regulated, and I absolutely agree. The SI will ensure that the regulatory regime in the UK will operate effectively in a no-deal scenario. I reassure her that the SIs in the programme have passed through the usual quality control procedures and we have engaged extensively with the FCA in drafting them.

Based on my earlier comments about the additional full-time equivalents that the FCA has had this year in preparing effectively to manage the programme, I am confident that it has adequate resources. Regarding the future pressure, the FCA is not funded by the Government but by a levy on industry, so it will be up to the authority to bring that forward in its plan, which it will do shortly for 2019-20.

I note the observations about the familiarisation costs and the mechanism to calculate them. To be clear, the SI has been assessed to result in an estimated one-off familiarisation cost of £8,300, which, shared between the 16 UK benchmark administrators authorised under the regulations, is £518 each.

[Ms Eagle]

The hon. Gentleman may be a turbo-charged understander and reader of things, which perhaps I am not, but is he really telling the Committee that if one has read a statutory instrument as technical as this, one automatically understands it at so many words a minute?

[John Glen]

The hon. Lady will know, from her two years as Exchequer Secretary between 2007 and 2009, that in this sort of context it is unrealistic for me to read out the rationale behind the familiarisation costs methodology—

[Ms Eagle]

It is rubbish!

[John Glen]

I will, however, write to her to explain how we have used it. I acknowledge her scepticism about the situation.

The hon. Member for Oxford East raised a point about the definition of “commodity” not being in the EU regulation. As I cannot respond here and now, I am grateful for her graciousness in allowing me to write to her.

On the LIBOR points that the hon. Member for Wallasey raised, the UK did have eight domestic benchmarks but they were superseded by the EU’s more comprehensive range. The regime we are now part of is more thorough than it was 10 years ago.

The hon. Member for Oxford East asked whether it was appropriate for the FCA to assess the critical benchmarks. Just to contextualise that for the benefit of the Committee, I should say that the FCA carries out its assessment against the conditions relating to critical benchmarks set out in the benchmarks regulation. The FCA will present its conclusions to the Treasury. The Treasury must make regulations designating a benchmark as critical if the FCA makes a recommendation in accordance with the requirements of the amended provisions. The FCA is the appropriate body to carry out that assessment due to its technical expertise. That is consistent with the current split of functions between the Commission and ESMA, and it has been onshored appropriately.

The hon. Member for Wallasey asked about the wider impacts. I acknowledge her recognition of a green impact assessment, published on 8 February. Impact assessments for the SIs focus narrowly on the changes that the instruments make and on how businesses will need to respond. I concede that they do not deal with the broader economic impact of leaving the EU. There is considerable debate about what that would mean in a no-deal scenario and my judgment is that there would be a significant impact, in the short term particularly.

The impact assessment of the European Union (Withdrawal) Act 2018 deals with the impact of the parent Acts, and the Government have also published analysis, as the hon. Lady will know, of the potential economic impact of a range of scenarios. I must stress that the SI mitigates the impact of leaving the EU without a deal, and if it were not in place industry would face greater disruption and cost.

In conclusion, the changes are needed to ensure that the UK has an effective regime for regulating benchmarks and that the legislation functions appropriately if the UK leaves the EU without a deal or an implementation period. I believe that I have dealt with Opposition Members’ points. I hope that the Committee has found the sitting informative and will now join me in supporting the regulations.

Question put and agreed to.

Resolved,

That the Committee has considered the draft Benchmarks (Amendment and Transitional Provision) (EU Exit) Regulations 2019.

Finance (No. 3) Bill

Angela Eagle Excerpts

3rd reading: House of Commons & Report stage: House of Commons
Tuesday 8th January 2019 Commons Chamber

[Yvette Cooper]

I am not drawing on macroeconomic predictions about the overall impact on the economy, although I note that there are predictions of a 9% reduction compared with the level at which we might otherwise be. I am actually focusing on the microeconomic impact on individual businesses across the country of simply seeing those costs go up. That is a real impact of the tariffs. It is not about confidence, levels of investment and so on; it is about the real impact of those costs on consumers, manufacturers, exporters and importers that is the real consequence of WTO tariffs.

[Ms Angela Eagle (Wallasey) (Lab)]

I am sure my right hon. Friend has noticed that the Office for Budget Responsibility said in its report on the recent Budget that there has been a loss of 1.5% of GDP since the referendum, and that the uncertainty was likely to make that worse, at least in the medium term. This Parliament has a duty to ensure that we mitigate that as much as possible, which is why I will be supporting her amendment.

[Yvette Cooper]

My hon. Friend is right that we have a responsibility not to make life harder for our manufacturers, which face huge pressure and huge international competition. We also have a responsibility not to make life harder for our consumers, who could see significant increases in prices. The British Food Importers & Distributors Association warns that WTO rules could mean that food prices go up by over 20%.

European Union (Withdrawal) Act

Angela Eagle Excerpts

Thursday 6th December 2018 Commons Chamber

[John McDonnell]

Others have said that the knock-on consequences of the uncertainties are catastrophic, and I do not disagree.

Economists from UK in a Changing Europe, working with the Institute for Fiscal Studies, estimated that the public finances could be worse off to the tune of nearly 2% of GDP, which would mean £40 billion if it happened today. There is no way of dressing this up: if the House approves the Government’s deal, every region of the UK—every sector, every household and business—will suffer.

Let me deal with the backstop that was arranged. Remarkably, the Government have published no specific analysis of the consequences and cost of their proposed backstop. We now know from the Attorney General’s advice, which was prised from the Government and they were forced to publish, that there will be new barriers to trade between Northern Ireland and Great Britain, that there will be new barriers to trade between the UK and the EU, and that the backstop could be permanent. I quote directly from the Attorney General’s advice, which says that

“the Protocol would endure indefinitely until a superseding agreement took its place, in whole or in part, as set out therein. Further, the Withdrawal Agreement cannot provide a legal means of compelling the EU to conclude such an agreement.”

[Ms Angela Eagle (Wallasey) (Lab)]

Does my right hon. Friend agree that that kind of arrangement really puts this country over a barrel in the subsequent trade arrangements, because such a time limit weakens our position and makes it far less likely that we will be able to come to a good conclusion?

[John McDonnell]

Yes, as my right hon. Friend the leader of the Labour party pointed out the other day, the timing does put us over a barrel. What is the incentive for the EU in this situation where we have given all the cards to the other negotiators?

So we are now faced with a prospect of new trade barriers and the potential for an indefinite backstop, but we have no assessment from the Government of what this will mean for the economy. Astoundingly, according to the Attorney General’s legal advice,

“for regulatory purposes GB is essentially treated as a third country by NI for goods passing from GB into NI.”

Others have had their say on the constitutional implications of the backstop—a rod that the Government have created for their own back. But the Government’s refusal to include prolonged membership of the backstop in last week’s economic analysis leads us to conclude that either the Government do not know what the effect of remaining in it would be, or if they do, they do not want us to know the cost and economic consequences of an indefinite backstop.

--- Later in debate ---

[Ms Angela Eagle (Wallasey) (Lab)]

After two wasted years of wrangling with her own Cabinet and her own party, the Prime Minister has come back from Brussels with her deeply flawed and unacceptable EU withdrawal deal. And she has achieved the impossible: she has united the country in horror against it. According to all the official forecasts, this is a draft treaty that will make our country poorer. Far from taking back control, the deal we are debating today gives away both our sovereignty and our influence. And as the Attorney General’s advice has confirmed, this treaty gives the EU a veto on our leaving a temporary customs union arrangement even if talks on a new trade deal have irreparably broken down. This is a deal that transforms us from rule makers into rule takers and diminishes our influence in the world.

The Prime Minister promised to provide a detailed and substantive document on our future relationship with the EU alongside the draft treaty. She has actually supplied a half-baked 26-page wish list of banal aspirations that was cobbled together at the last minute and has no legal force. The failure to outline the nature of our future relationship with the EU makes this agreement a blind Brexit, and that is completely unacceptable. The Prime Minister expects this House to endorse her deal without any clear idea of what our future trading arrangements might be. She asserts that there is no alternative to her deeply flawed deal apart from a catastrophic no-deal Brexit, which we know would decimate our economy. This negotiation is an abject failure by a Government who have wasted two years negotiating with themselves rather than doing the right thing for our country.

This could all have been so different. The Prime Minister has badly mishandled the Brexit process from the beginning, making a series of catastrophic misjudgments, and she is now reaping what she has sown. As a newly installed Prime Minister, she could have shown some real leadership. She could have recognised that although the country had voted to leave the European Union in 2016, there was no instruction from the people on what sort of Brexit the Government should pursue. She could have launched a national process of debate and reconciliation to build consensus around the best way forward as a way of healing the raw divisions that the referendum exposed. She could have involved the Opposition parties in this endeavour, recognising that her predecessor in Downing Street had done nothing to prepare the country for what would happen if the leave campaign won. But she did not.

The Prime Minister chose instead to kowtow to the irreconcilable Brextremist ideologues in her own party. In place of a national debate and a hope of reconciliation we were told, “Brexit means Brexit”. In her first conference speech as party leader, she set the tone by lambasting citizens of the world as citizens of nowhere, insulting and worrying EU citizens working in the UK. She has since accused them of jumping the immigration queue. Absurdly wrapping herself in the Union Jack to appease her own Eurosceptics, she then set a course in her Lancaster House speech for a hard, “red, white and blue” Brexit. The Prime Minister interpreted “taking back control” as centralising power to herself and her increasingly dysfunctional Government. Far from reaching out and respecting the sovereignty of Parliament, she attempted to ride roughshod over the constitutional role of this House. She had to be dragged kicking and screaming back to Parliament by the Supreme Court, which confirmed that legislation was required to invoke article 50 and fire the starting gun on the withdrawal process.

Once the Prime Minister had triggered article 50, she promptly called a general election in the expectation that she would win by a landslide—

[Chris Ruane (Vale of Clwyd) (Lab)]

She let me back in.

[Ms Eagle]

And we are all grateful for that. In the event, the Prime Minister squandered three months’ negotiating time and the first Conservative majority for 25 years. This Prime Minister has repeatedly invoked her own partisan definition of “the national interest” when, in truth, she has acted at all times in the narrow sectional interest of her own deeply divided party. That is why her belated pleas for unity and an end to division rang so hollow when she opened the debate on Tuesday. Rarely has such narrow rigidity and authoritarian instinct met a situation that required maximum flexibility and creativity. Rarely has there been such a catastrophic failure of imagination, political judgment and party management. I cannot support this botched blind Brexit deal. It fails to protect jobs and economic prosperity, and it will make us poorer.

Leaving the EU: Economic Analysis

Angela Eagle Excerpts

Wednesday 28th November 2018 Commons Chamber

[Mel Stride]

My hon. Friend is absolutely right in his latter point about uncertainty. Of course, this is simply a set of estimated outcomes, and everybody in the House will look at it closely and form their own opinion upon it. The impacts of a no-deal Brexit are estimated within the papers, but he is absolutely right that what we inherited in 2010—the largest peacetime deficit in our history—is a very frightening comparison to contend with.

[Ms Angela Eagle (Wallasey) (Lab)]

The Government, like a third-rate conjurer, hope that if they produce a range of examples for scenarios that are not going to happen, such as no deal or Chequers, somehow we will be taken in by it. Is it not about time the Government do what the House asks them to do, whether on legal advice publication or giving us the facts to make the decision, so that this House can take back control on behalf of the British people?

[Mel Stride]

We have done precisely what the House required us to do in setting out the estimated impacts of the deal, of an average free trade agreement, of an EEA-style scenario and, indeed, of a no deal. As for the hon. Lady’s point about the legal advice, I know that the Attorney General will be making a statement to the House in due course.

Food Labelling and Allergy-Related Deaths

Angela Eagle Excerpts

Tuesday 9th October 2018 Commons Chamber

[David Rutley]

It is important that we take forward this review to ensure that this is done robustly, but it is crucial that businesses step forward and address any concerns that consumers have. It is good business practice and businesses should be doing it.

[Ms Angela Eagle (Wallasey) (Lab)]

Surely the Government should step out of their complacent attitude to regulation and strengthen enforcement, too. Instead of seeing regulation as something to be avoided and red tape as a dirty word, surely it is about time the Minister and his Department stepped up to the plate and did the things that need to be done to protect the consumer.

[David Rutley]

And we are; I have said on numerous occasions that we will be strengthening the allergen labelling framework. We are committed to doing that—

[Ms Angela Eagle]

When?

[David Rutley]

As soon as possible, because we do not want to see any more of these cases that we have so tragically heard about in recent days; we need to take the steps to do that in an organised way.

Spring Statement

Angela Eagle Excerpts

Tuesday 13th March 2018 Commons Chamber

[Mr Hammond]

I am grateful to my right hon. Friend. He is right: it was the right choice. Because we made that choice, throughout that period employment in this country continued to grow. We avoided the very high levels of unemployment suffered by many of our European neighbours. We avoided the catastrophic, generation-blighting levels of youth unemployment suffered by many of our European neighbours, which will be affecting their economies and societies not just for a few more years but for 30, 40 or 50 years to come. It was the right decision. We have executed our plan and we should stick to it.

[Ms Angela Eagle (Wallasey) (Lab)]

The Chancellor has been very upbeat today, but why is he so upbeat when the growth figures show that we have gone from being near the top of the G7 and the G20 growth lists to the bottom of both?

Budget Resolutions

Angela Eagle Excerpts

Wednesday 22nd November 2017 Commons Chamber

[Ms Angela Eagle (Wallasey) (Lab)]

It is a pleasure to follow the right hon. Member for Wokingham (John Redwood). The Office for Budget Responsibility forecast, which was published today, has demonstrated that we are in a downgraded economy. Real wages are down, business investment is down and productivity is downgraded now and far into the future. It is therefore no wonder that growth is down from the Chancellor’s modest forecast in March of this year. He has presented news today of a slowing economy for the next three years—an economy that is forecast to be £65 billion smaller in 2020 than was expected early last year. Aside from setting apart £3 billion to plan for Brexit, which is more than he gave to the NHS, he made no mention of the £40 billion or so divorce payment that is presumably going to be agreed with the EU soon. He used headroom and some reclassification of housing association debt to announce some tinkering, but, fundamentally, nothing has changed with this Budget.

This is the eighth Tory austerity Budget in a row, and it is taking place against a backdrop of an economy in the doldrums. We were told by George Osborne in the first austerity Budget that we all had to make sacrifices in order to eliminate a deficit caused by the global financial crisis. Entirely predictably, that five-year plan failed, so the pain was extended for another five years. Now we are told that the second five-year plan has failed too, so this Chancellor is extending austerity for another five years until 2025. That is already a 10-year delay on what was meant to be a five-year recovery plan. That means 15 years of austerity, cut after cut and pressure on the public services year in, year out, with no end in sight. This austerity policy has a huge human cost that we on this side of the House see daily in our constituency advice surgeries. Homelessness and destitution are on the rise, food bank use is soaring and the benefit system is failing most of those who have to rely on it through no fault of their own.

The Conservative party is in thrall to a right-wing, libertarian ideology. It wants to shrink the size of the state as a deliberate political aim. It wants state expenditure to be as low a percentage of GDP as possible, despite the increasing demands of an ageing population and the need to make our economy fit for the future in rapidly changing times. It expects people to sink or swim, and it is not that not concerned about providing them with any lifeboats—

[John Redwood]

rose—

[Ms Eagle]

The right hon. Gentleman has just spoken; he can go off and advise his clients on investing their money abroad.

The Conservative party saw an opportunity to pursue a minimal state agenda in the aftermath of the global financial crash, and it has done so at great cost to many. It made a deliberate choice that cuts to public spending would bear 80% of the cost of eliminating the deficit and that only 20% would be accounted for by tax changes, and we now know that the cuts have fallen disproportionately on the most vulnerable and those least able to look after themselves. The Chancellor’s predecessor liked to claim that we are all in this together, but he cut the top rate of tax for his super-rich friends at the same time as ensuring that public sector workers had a decade of pay freezes and falling real living standards.

Meanwhile, the Government have systematically reduced the social safety net to tatters for some of the most vulnerable people in our society. By 2021, Wirral Council, which is my local authority, will have had its funding cut by 40% since 2010. Efficiency savings cannot cover cuts on that scale, and it is no surprise that that level of cuts has decimated council services such as adult social care, which for a second time was not mentioned in the Budget and saw a 26% cut between 2011 and 2016, meaning that essential social care for the elderly is not available and people in dire need are being left with little or no help. In education, real-terms funding cuts have led to a loss of £149 per pupil and 29 teachers in Wallasey alone. Cheshire and Wirral Partnership NHS Foundation Trust is being told to cut £1 billion in the next five years. Merseyside fire and rescue service used to have 40 fire engines to save lives; it now has 28.

[Martin Whitfield (East Lothian) (Lab)]

I welcome today’s announcement on VAT for Scottish police and fire services, but does my hon. Friend agree that the reinstatement of the VAT exemption comes far too late, because there have been added deductions for years and years?

[Ms Eagle]

That is absolutely right. Merseyside police will have suffered cuts of £183 million by 2021 and is 1,000 officers and 700 support staff down. It is little wonder that crime levels are now the highest in a decade. Madam Deputy Speaker, I could go on, but I think you get the point. Austerity has exacted a brutal cost from the most vulnerable.

This Budget takes place against a backdrop of unparalleled uncertainty and danger for our country because this Government are paralysed by their own disagreements over Brexit. They are unable to resolve their own internal contradictions around the Cabinet table, let alone chart the path to a successful conclusion of the article 50 negotiations in Brussels. We have a Prime Minister who puts the interests of her party above those of her country, and half of the Tory party would rather that we crashed out of the EU without any deal than stay in a moment longer.

[Sir Desmond Swayne (New Forest West) (Con)]

Does the hon. Lady not acknowledge that preparing for no deal is an essential ingredient of securing a good deal? Has she ever bought a second-hand car? Did she go in and tell the salesman that she had to leave with a car and yet expect a discount?

[Ms Eagle]

I would certainly buy a second-hand car from the right hon. Gentleman.

The Chancellor, who is regarded with the utmost suspicion by the Brextremists on his own side, was warned at the weekend that he had to produce a game-changer of a Budget or his career would be over. They want rid of him because they do not think he is Eurosceptic enough. The Prime Minister has already shown her faith in him by making him disappear for the entire recent general election campaign. After his outing on the Sunday politics shows at the weekend, when he claimed that no one in Britain was unemployed, we can see what they are worried about. It is no wonder that he declined to get in the driverless car that they were going to put him in for a pre-Budget high-tech photo-op.

The Conservative party is responsible for the slowest recovery from recession since the Napoleonic wars and the largest squeeze on living standards since Victorian times, and it is presiding over record levels of wealth inequality. That is not a record to be proud of. The Budget has done nothing to address those abject and fundamental failures. Since the crash, GDP per head has increased by just 2.4%. During the 1990s recession, the comparable figure was 21%. Meanwhile, driven by the significant decline in the value of the pound after the referendum vote, UK inflation rose to 3% in September, which is double the rate in the eurozone. Growth in the UK is anaemic by historical trends and is on a downwards path, as shown by the OBR today.

In real terms, wages are lower now than they were in 2010, and the living standards squeeze has returned as prices are outstripping wage increases once more. The public sector has seen a decade of falling wages, which is causing real hardship. The TUC has calculated that, as a result of the public sector pay freeze, paramedics and NHS dieticians are £3,800 a year worse off since 2010, firefighters are £2,900 a year worse off, and Crown prosecutors in our courts are £4,400 a year worse off. The TUC’s polling shows that 15% of staff in our public services have skipped meals in order to make ends meet.

Meanwhile, in Tory Britain, workers are not only struggling with stagnant or falling pay levels; they are also experiencing a huge increase in job insecurity. One in 10 of the workforce—3.2 million people—now face insecurity at work, including: 800,000 on zero-hours contracts; 760,000 on non-standard forms of temporary working, including agency and casual work; and 1.7 million in low-paid self-employment, earning below the Government’s modest so-called living wage.

It is little wonder, then, that tax receipts are falling as employers take advantage of tax structures that incentivise less secure forms of employment. It is little wonder that Bank of England figures show that household levels of unsecured consumer debt are rising at their fastest rate since the global financial crash—up by over 10% last year and now higher than they were in 2008. The Budget contained nothing to address any of those important concerns.

However, there are a few people who are doing really well out of the current system. Pay ratios between FTSE 100 CEOs and the rest continue to widen. They are now paid a staggering 160 times more than the average worker. That means they made more money by the first Wednesday of 2017 than the average worker could earn all year. Some 5% of households now own 40% of all the wealth in Britain. Is that really the kind of society we wish to create?

Boosting productivity is the key to economic growth and pay increases, yet over the past decade the UK’s productivity performance has been the worst of all G7 countries. Since 2010 the Government’s failure to invest in infrastructure and in skills has seen our productivity flatlining so that we are now 15% lower than the G7 average. So bad has been this Government’s record on productivity that the OBR has revised down its assumptions about future growth from productivity gains. The UK has the lowest level of investment in the G7. Driven by the Government’s failure to invest, business investment has grown slowly over the past 10 years—by only 5%. That is nowhere near enough to retool our economy and make it fit for the future. Addressing that problem must be at the heart of any Government’s industrial strategy.

This Budget might have been the time when the Chancellor decided to tackle the regional disparity in economic performance, when he took the opportunity to invest in our infrastructure and skills base, and when he finally gave Britain the pay rise it so badly needs. But he did not. This is a Budget of missed opportunities. Once more there is nothing on social care. It is a bits and pieces Budget that fails to rise to the huge challenges that this country faces.

Tax Avoidance and Evasion

Angela Eagle Excerpts

Tuesday 14th November 2017 Commons Chamber

[Dame Margaret Hodge]

I agree with the hon. Lady that resourcing HMRC is absolutely central to the fight against tax avoidance and evasion.

Tax avoidance is completely different from tax planning, whereby, for example, Parliament intended to encourage people to save for their pension by introducing ISAs with tax breaks. Tax avoiders, on the other hand, thwart the intention of Parliament. Their action means our collective will is ignored. We should not tolerate it and we must act urgently to eradicate it.

[Ms Angela Eagle (Wallasey) (Lab)]

Does my right hon. Friend agree that one of the best ways of trying to deal with this increasingly serious issue is to have openness and transparency in all funds held offshore, so that those who are doing this have to face the legitimate scrutiny of taxpayers in this country?

[Dame Margaret Hodge]

My hon. Friend makes an absolutely central point to what we will be asking for today.

Not only does the behaviour of a few damage trust in the system as a whole, but it damages the public services our taxes are used to fund. At a time when the NHS is under such pressure, when public sector workers have had their wages held down for years and our schools are struggling to deliver the best start for all our children, for the super-rich and the powerful to think that they can opt out of their duty to contribute fairly through paying taxes is completely and utterly and totally immoral and wrong, and it is our responsibility to put an end to it.

Paradise Papers

Angela Eagle Excerpts

Monday 6th November 2017 Commons Chamber

[Mel Stride]

My hon. Friend will know that we are examining several areas. He will also know that in June of this year—very recently—we brought in the money laundering regulations to make sure that banks, lawyers and accountants are properly focused, in real time, on ensuring that corrupt practices are identified and borne down on as appropriate.

[Ms Angela Eagle (Wallasey) (Lab)]

Is not the Minister worried about the tangled web of Russian money that appears to be involved at very high levels, as shown by these leaks? Will he not agree that there is now a great public interest in having transparency of ownership and getting these registers published as soon as possible? Why do not the Government just make an announcement that the overseas territories are going to do that, and get on with it?

[Mel Stride]

As I have already explained to the hon. Lady and the House, the register of beneficial ownership is now an element within these tax jurisdictions. It is accessible by HMRC, which is, after all, the authority that we rely on to bear down on tax avoidance. As to her comments about Russian money, I have no doubt that if HMRC can get the information that it has requested from the BBC, The Guardian and the group of journalists, it will be even better prepared to clamp down on such issues where activity is found to be inappropriate.

Money Laundering: British Banks

Angela Eagle Excerpts

Tuesday 21st March 2017 Commons Chamber

[Simon Kirby]

My hon. Friend raises an important part of the Criminal Finances Bill, which is going through the other place as we speak. I look forward to its receiving Royal Assent and becoming law, giving new law enforcement powers to stop any of this activity.

[Ms Angela Eagle (Wallasey) (Lab)]

The Economic Secretary has shown real complacency about the huge and building scandal that has been revealed by The Guardian today. Given that our banking sector is very large and that the consequences of its being destabilised by such criminal behaviour are very serious for our economy, does he not realise that his complacent, process-driven answers today are simply not good enough?

[Simon Kirby]

I do not recognise that at all. The FCA and the NCA are well placed to investigate this, if appropriate. We have not only world-leading financial regulation but world-leading financial services. More than 1 million people across the country are employed in financial services in all our constituencies, and the vast majority of them work hard, do a good job and represent customers as well as they can. We have outlined the measures that the Government are undertaking—[Interruption.] I have addressed everything that the hon. Member for Wallasey (Ms Eagle) mentioned. This Government are doing more than at any time in the past 10 years to tackle this issue.